Editor's note: On Oct. 26, Beijing time, after two days of consultations, the fifth round of China-US economic and trade talks achieved positive results. According to the Chinese side, guided by the important consensus reached in previous phone calls between the two heads of state this year, the two sides reached a basic consensus on important economic and trade issues of mutual concern, including the US Section 301 measures on China's maritime logistics and shipbuilding industries, the extension of the suspension period for reciprocal tariffs, fentanyl tariffs and law enforcement cooperation, agricultural product trade, and export controls.
【Anchor】Hello everyone, welcome to DDN Business Insider. I am Yunfei Zhang. The Fourth Plenary Session of the 20th Central Committee of the Communist Party of China was held last week, during which the meeting reviewed and approved the "Suggestions on Formulating the 15th Five-Year Plan for National Economic and Social Development" from the Central Committee. Following that, a press conference was held to introduce and interpret the spirit of the Fourth Plenary Session. What signals were conveyed during this session? What new changes can we expect in the context of the ongoing fluctuations in China-U.S. trade relations? Today, we invite former chief economist of a brokerage firm Li Daxiao, chief economist of FOST, Feng Jianlin, and a researcher from the Chinese Academy of International Trade and Economic Cooperation, Zhou Mi, to provide their analyses.
First, I would like to ask Mr. Feng Jianlin to interpret the content of the communiqué from the Fourth Plenary Session, specifically what it suggests, and what noteworthy differences from previous statements we should pay attention to.
【Feng】Overall, this meeting is very positive. It can be said that the ideological approach, strategic goals, policy tone, and key tasks for economic and social development have maintained continuity and stability while also being optimized and improved. The main changes are reasonable and are moving in a better direction, conveying a very positive signal.
To elaborate, regarding the environment, the meeting reiterated uncertainty but emphasized that the long-term supportive conditions and fundamental trends remain unchanged. It stressed ensuring decisive progress in achieving socialist modernization. This is still very positive and conducive to enhancing confidence and guiding expectations.
In the guiding ideology for the next five years, there is an increased emphasis on economic construction as the center and reform and innovation as the fundamental driving force. This marks a return to the successful experiences of the past 40 years and indicates that the intensity of reform and innovation may increase.
In the goals for 2035, a new phrase was added stating that international influence will significantly rise. In the future, we should expect more proactive participation in international affairs.
In terms of work deployment, the focus remains on building a modern industrial system, scientific and technological innovation, expanding domestic demand, and reform and opening up. These tasks are clearly highlighted. The approach to overall balance has shifted from primarily focusing on public reforms to now emphasizing coordinated public and private needs.
From the perspective of domestic demand, macro policies will further shift towards benefiting people's livelihoods and promoting consumption, with a focus on investment in people. In terms of reforms, there is an emphasis on accelerating the establishment of a market economy system, aiming to invigorate various business entities and enhance the market-oriented allocation of various market factors. This is a positive response to concerns from various sectors.
In the area of expanding openness, the most important point raised is the need to create a new situation of win-win cooperation, sharing opportunities, and developing together with countries around the world. This represents an elevation of the concept of openness.
Regarding people's livelihoods, there is a mention of promoting high-quality development in the real estate sector. This topic was not addressed in the 19th or 18th Five-Year Plans. The communiquéplaced this topic under people's livelihoods directly rather than under risk prevention, indicating that future work in real estate will emphasize its role in safeguarding livelihoods, which is certainly a positive sign for the industry.
Notably, the entire text of the planning suggestions does not mention finance, prices, state-owned enterprises, private economy, artificial intelligence, or other such terms. This is another point that deserves attention.
Concerning economic work for this year, the Plenary Session also provided an analysis. It is quite rare for this session to emphasize the firm achievement of annual economic and social development goals. We still expect significant pressure on the economy in the fourth quarter, and macro policies will definitely need to be moderately increased. How exactly this increase will be implemented is something to watch for in the future.
【Anchor】Previously, an expert from the National Development and Reform Commission stated that changes in trade relations between China and the U.S., as well as with other countries, are important external factors considered in the "15th Five-Year Plan" recommendations being reviewed by the Fourth Plenary Session. Mr. Li, do you think this consideration is reflected in the current communiqué?
【Li】In international trade, we remain firmly against the trend of anti-globalization. We are committed to promoting mutually beneficial cooperations and advancing good trade relations with countries around the world. The proportion of our trade with the U.S. is continuously decreasing. However, we have made significant progress in other regions, including the ASEAN, the EU, and the Belt and Road Initiative areas. This year, our trade volume still shows very positive figures. Moving forward, our orientation towards expanding global trade will not change.
【Anchor】Speaking of China-U.S. economic relations, the latest developments include trade consultations taking place in Malaysia from October 24 to 27. Additionally, the White House Press Secretary announced that U.S. President Trump will meet with Chinese President Xi Jinping on October 30. Mr. Zhou, what is your view on the prospects of the meeting between the two heads of state?
【Zhou】We hope that if the two heads of state meet, they can effectively provide clearer guidance and direction to their respective teams to manage existing conflicts and differing approaches, moving further towards a mutually beneficial foundation. This requires specific actions, not just verbal commitments; real actions are needed to help businesses reduce their concerns about future uncertainties.
【Anchor】What consensus do you anticipate that both sides are most likely to reach at this stage, or what areas of cooperation exist?
【Zhou】Both sides have conducted consultations through various channels, and there are many areas where consensus can be reached, depending on each side's attitude and actions. Currently, I believe it would be very important and valuable to take retroactive measures regarding actions that have not yet been implemented or that threaten to be implemented.
We see that there is actually a broad mutual trade demand between China and the U.S.; for example, U.S. agricultural products are in demand in China. However, due to relatively high tariffs and concerns about the supply chain, some products have been unable to continue entering the Chinese market, which may not be the best choice for either side.
Therefore, aside from the measures that have not yet been implemented or have just been put into effect, which can be easily reversed to reduce market impact, there are still possibilities for reaching consensus in areas of mutual benefit. Of course, this consensus does not necessarily translate immediately into actual actions, as the market needs time to respond.
So, if they reach a basic consensus, the market will prepare for future cooperation, and this preparation will take some time. I think this will be beneficial for both sides. Additionally, there is still a lot of new space for China-U.S. economic cooperation. Beyond resolving existing conflicts, we can also collaborate in new areas, especially those that present challenges for both sides that need to be addressed.
【Li】The economic and trade relationship between China and the U.S. is still under ongoing negotiations. I believe that through continuous discussions, the two sides will be able to find some common ground. The trade relationship between China and the U.S. is actually a very typical complementary one, with significant mutual industrial complementarity. The overall trend should be to further strengthen rather than to weaken this trade relationship. I believe that achieving win-win cooperation must outweigh the differences. This is a mutually beneficial relationship, and creating friction or division is not a choice that maximizes the interests of both sides. I remain optimistic, believing that the possibility of reaching cooperation is significantly greater than the possibility of failing to do so.
【Anchor】Mr. Feng, what is your perspective on this?
【Feng】Regarding the outcomes of the consultations and the meeting of the leaders, everyone should have a rational expectation. It's unrealistic to hope that all issues will be resolved smoothly, and saying that talks have collapsed also seems unlikely. More likely, we will see a middle-ground situation where some issues are resolved while others remain stalemated. As for the meeting, it's more of a routine showcase; it wouldn't be appropriate for them not to meet. However, if you ask whether there will be major achievements, it's probably not the case; that's the most likely scenario.
【Anchor】On the domestic front, the "15th Five-Year Plan" will be officially announced at the National People's Congress in March next year. What uncertainties and key points should investors pay attention to between now and early next year?
【Zhou】For example, when will the current government shutdown in the U.S. end? This will certainly affect investors. Additionally, whether the U.S. Federal Reserve will adjust its monetary policy during its two later meetings this year is also worth noting. There's also the possibility of a bilateral meeting between the heads of state based on the multilateral meetings, including formal visits. These are aspects we should watch for.
Furthermore, our annual economic work conference at the end of the year, along with our outlook for future development and key industries in China's economic growth, are all worth looking forward to. Besides bilateral interactions, important activities in international mechanisms involving both China and the U.S. during this period should also be monitored. For example, events like the WTO and G20 meetings this year and next year's ministerial meetings could release information that might impact each side's development direction. There will also be many unforeseen events that we need to keep an eye on.
【Anchor】OK, thank you to all the guests. That's all for this episode. Remember to follow us on YouTube or download our APP. I'm Yunfei Zhang. Thanks for watching, and see you next time.
(Anchor: Laura Cheung | Edited: Kelly Yang, Laura Cheung, Rachel Liu | Translate: Kato Ip | Proofread: Chris Liu)
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